class 12 retirement of a partner practical

Class 12 Accountancy- Retirement of a
Partner[Practical]

Q1:- A, B and C share profits in the ratio 3 : 2 : 1. B retires. Goodwill of
the firm is valued at ₹36,000. Pass necessary journal entry.

Solution:
Old ratio = 3 : 2 : 1
B’s share = 2/6
B’s share of goodwill = 36,000 × 2/6 = ₹12,000

Gaining ratio:
A gains = 3/6 − 3/4 = 1/4
C gains = 1/6 − 1/4 = 1/12
Gaining ratio = 3 : 1

Journal Entry:

A’s Capital A/c Dr 9,000

C’s Capital A/c Dr 3,000

To B’s Capital A/c 12,000

Q2:- Revaluation of Assets & Liabilities
X, Y and Z share profits in the ratio 2 : 2 : 1. Z retires. Stock increased by
₹5,000 and Creditors increased by ₹2,000. Prepare Revaluation Account.

Solution:

Revaluation Account

, Dr ₹ Cr. ₹

Creditors ↑ 2,000 Stock ↑ 5,000

Profit 3,000
transferred to
partners



Profit = 5,000 − 2,000 = ₹3,000

Distributed in old ratio (2:2:1):
X = 1,200
Y = 1,200
Z = 600

Q 3: Distribution of Reserves
A, B and C share profits equally. B retires. General Reserve ₹30,000 and
P&L A/c ₹15,000 appear in books. Pass journal entry.

Solution:
Total reserves = 45,000
Each partner’s share = 45,000 ÷ 3 = ₹15,000

Journal Entry:

General Reserve A/c Dr 30,000
Profit & Loss A/c Dr 15,000
To A’s Capital A/c 15,000
To B’s Capital A/c 15,000
To C’s Capital A/c 15,000

Q4: Settlement through Loan Account
P, Q and R share profits in the ratio 3 : 2 : 1. Q retires. Amount due to Q is